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Danielle Chiesi, a central figure in the massive insider trading scandal that included a long-time IBM executive, faces up to four years in prison after pleading guilty to conspiracy charges in U.S. District Court.

Chiesi, who was one of 24 people arrested in October 2009 in connection with the insider trading case that investigators alleged generated more than $25 million in illegal gains, admitted to passing on nonpublic information about various companies-including IBM, Advanced Micro Devices, Sun Microsystems and Lenovo-to her colleagues at hedge fund New CastleFunds. She also admitted to giving information to Raj Rajaratnam, co-founder of the Galleon Group hedge fund and the central figure in the case.

Rajaratnam is scheduled to go on trial next month.

During a hearing in U.S. District Court in New York Jan. 19, Chiesi admitted to "crossing the line" through her actions, and said she was taking "full responsibility," according to a Reuters report.

Further reading

"I am deeply ashamed by what I did," Chiesi told the court, according to Reuters. "By crossing the line on those occasions, I ruined a 20-year career in my field and brought disrepute to what was an honorable profession."

Chiesi was the 17th person charged in the case to plead guilty. She pleaded to three counts of conspiracy to commit securities fraud.

Her guilty plea came four months after Robert Moffat, who spent 31 years with IBM and with whom Chiesi had a person relationship, was sentenced to six months in prison. Moffat, who at the time of his arrest was senior vice president and group executive of IBM's $20 billion Systems and Technology Group, admitted to passing information onto Chiesi about IBM finances and its pursuit of Sun, Lenovo financial figures and AMD's efforts to spin off its manufacturing business to create what is now Globalfoundries.

Moffat left IBM soon after his arrest.

A number of other high-tech executives also were arrested in connection with the case, while former AMD CEO Hector Ruiz-while not charged-has been named in published reports as a figure in the case.

The significance of the case was not only the scope-in terms of money and people-but also the use by federal investigators of wiretapping technology, more commonly found in investigations of organized crime. Rajaratnam, Chiesi and Moffat-among others-were taped discussing non-public information, according to court papers.

Federal agencies-including the Securities and Exchange Commission, U.S. Attorney's Office and FBI-are aggressively going after such insider trading cases. For example, in December 2010, former employees at Dell, AMD and Taiwan Semiconductor Manufacturing Co. were among those arrested in connection with an insider trading case that involved the employees also working as consultants to outside networking firms.

Essentially these firms paid the technology company employees hundreds of thousands of dollars to work as consultants, in exchange for insider information on their companies.

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